Theme: Money & Property

Precautions to be taken by banks while dealing with cheques

Use CTS Cheques Only

Banks should use “CTS 2010” cheques which are not only image friendly but also have more security features.

Using Stamps on Cheques With Care

Banks should exercise care while affixing stamps on the cheque forms, so that it does not interfere with the material portions such as date, payee’s name, amount and signature. The use of rubber stamps, etc, should not overshadow the clear appearance of these basic features in the image.

Scanning of CTS Cheques by Banks

It is necessary to ensure that all essential elements of a cheque are captured in an image during the scanning process and banks have to exercise appropriate care in this regard.

Can I get a bank loan to buy a property using the same property as the collateral?

Yes. You can get a loan from the bank to purchase an immovable property by using the same property as the collateral/security. This practice is widespread when people buy residential properties in India. Home loans are generally approved on the basis that the prospective home is the collateral. Such loans fall under the definition of mortgage loans(( Section 58 of the  Transfer of Property Act, 1882.)). Commonly, when someone seeks a mortgage from a bank, they bind themselves to pay the loan, without delivering the possession of the mortgaged property, and agree that if they fail to repay the amount, the bank has the right to claim the mortgaged property and use it to settle the loan. Such mortgaged properties claimed by the creditors are often sold off in auctions as  ‘foreclosed’(( Foreclosure of property is dealt with under Section 67 of the TP Act and also the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002)) or ‘distressed’ properties under the SARFAESI Act.

Procedure to file Revised Return

Electronically filing revised return (offline):

Step 1: Select ITR Form

For offline mode, you have to  download the appropriate ITR Form from the Income Tax Department’s e-filing portal. If you want to know which ITR Form you have to fill, read here.

A pre-filled form can also be downloaded if you log in to the e-filing portal. From your account, you can choose to ‘Download Pre-Filled XML’, which can be imported to your ITR form for prefilling the personal and other available details.

Step 2: Fill in Details

You can fill in the downloaded ITR form offline. Ensure that you fill or correct the relevant details of the form. Under ‘General Information’, choose the ‘Return filing section’ as ‘Revised return under section 139(5)’ and ‘Return filing type’ as ‘Revised’.

Enter the Acknowledgement number and date of filing of the original return. You can find out these details by going to your e-filing account and choosing ‘Income Tax Returns’ under the e-filed returns/forms.

Step 3: Submit the Form

Generate and save the form. After preparing the revised return offline, you can then submit the form online by logging in to your account on the e-filing portal.

Step 4: Upload ITR Form in XML Format

After selecting the ‘e-File’ menu, leading to the ‘Income tax return’ page, you will have to select the assessment year, ITR form number, and state that your ITR is a revised return. You can then upload your form in the XML format. You have several options for verifying your form, and can choose to verify your form at the time of submission or later.

Once the verification is done, you can check your ITR status here.

 

Electronically filing revised return (online):

Step 1: Select ITR Form

For online mode, you have to directly login to the Income Tax Department’s  e-filing portal and select either ITR-1 or ITR-4. If you want to know which ITR Form is applicable to you, read here.

Step 2: Prepare your ITR Form online

After selecting the ‘e-File’ menu, leading to the ‘Income tax return’ page, you will have to select the assessment year, ITR form number, and state that your ITR is a revised return. You can then access your form by selecting the ‘Prepare and submit online’ option.

Step 3: Fill in Details

Ensure that you fill or correct the relevant details of the form. Under ‘General Information’, choose the ‘Return filing section’ as ‘Revised return under section 139(5)’ and ‘Return filing type’ as ‘Revised’.

Enter the Acknowledgement number and date of filing of the original return. You can find out these details by going to your e-filing account and choosing ‘Income Tax Returns’ under the e-filed returns/forms.

Step 4: Submit the form

After filling the form, you have several options for verifying your form, and can choose to verify your form at the time of submission or later.

Once the verification is done, you can check your ITR status here.

Eviction from rented property

Read below to know the conditions for eviction from the rented property.

Lease Agreement/Rent Agreement

If you have a lease agreement, only you or anyone you give permission to has the right to live in the rented property. However, there are certain circumstances where the landlord can evict you from the house. To do so, the landlord must make an application to an authority under this law called the Rent Controller, to evict you.

Some of the reasons for which a landlord can apply to evict you if you have a rent/lease agreement are mentioned below:

  • You have not paid rent for two months after receiving a demand notice from the landlord.
  • You have sublet the house, either in part or full, to someone else without the consent of the landlord.
  • You have used the house for a purpose other than that for which you rented it, and in this process caused public nuisance, damage to the premises, or harmed the interest of the landlord.
  • Neither you nor your family members have been living in the house for 6 months or more. (If you have rented a house for residential purpose and are using it for commercial purposes, then it will be counted as not living in the house)
  • You have caused substantial damage to the house.
  • The landlord wants to repair, rebuild or reconstruct his property, but cannot do it with tenants living there.
  • The house has become unsafe for human habitation and the landlord must carry out the repairs.

It is important to note that the reasons for eviction may differ from state to state. But largely the principles of eviction stay the same. The landlord must have a reasonable ground within the bounds of the law to evict you. If you feel that you have been unjustly evicted by your landlord, please contact a lawyer for further help.

Leave and License Agreement

A leave and license agreement will have a provision for the licensor (person giving out the property) to give a one month notice to get the licensee (person staying in the property) to leave their property. There are no other protections available under the law for this type of agreement unless explicitly mentioned in the contract.

Cheque Processing Problems

There are several reasons that could cause problems in cheque processing and lead to cheque bouncing. But not all of them warrant legal action. For example, a cheque could bounce if the sign of the drawer does not match with the account.

A detailed list of these reasons has been provided by the Reserve Bank of India in Annexure D of the Uniform Regulation and Rules for Bankers Clearing Houses.

Can I purchase a foreclosed property?

When the mortgage borrower is unable or unwilling to pay their equated monthly instalments (EMIs) under the terms of the loan three times consecutively, the lender has a right to acquire that property and either sell or lease it out(( https://www.livemint.com/Money/eGRMvQiYkQJbdaz5RG22vK/You-can-buy-foreclosed-property-online.html)). Such foreclosed properties are auctioned off by the lenders and a ‘reserve price’ is set i.e., the minimum amount the lender will accept as a winning bid for the property during an auction. Foreclosed properties are generally expected to be auctioned off at rates lower than their true market values. However, there are often concerns about the quality of such properties as the defaulters are often financially weakened, which would mean that the due repairs and general maintenance of the property are not undertaken regularly. While this is not the standard, it is important to conduct the requisite due diligence about the location, encumbrances and conditions of such property before investing.

Auctions of foreclosed properties can take place through offline or online modes, depending upon the Bank (lender). For an offline auction, prospective buyers should submit their bids with the requisite documents to the Bank before the date of the auction; and for the online mode, the buyers are expected to submit the requisite documents along with the bids online on the day of the auction itself(( https://tealindia.in/insights/how-to-make-a-secure-foreclosed-property-purchase-in-thane-with-teal-check/)).

Mandatory Linking of Aadhar/PAN for filing Returns

It is mandatory for all income tax taxpayers or persons who have to file income returns (even on behalf of others), to have a Permanent Account Number (PAN). Your Permanent Account Number (PAN) is a 10-digit alphanumeric identifier, issued by the Income Tax Department. Each taxpayer (e.g. individual, firm, company, etc.) is issued a unique PAN Number, and it is compulsory to quote your PAN Number on return of income tax.

While making an application for a PAN Number, it is mandatory to quote your Aadhaar/Aadhaar Enrolment ID.  You can get an instant PAN by providing your Aadhaar details. Once you have applied for a PAN, you can also check the status of your PAN application. If there are any changes in your PAN/Aadhaar details, you can update the details.

Read more here about the procedure for obtaining a PAN number.

Forging a cheque

When you fill a cheque either without the authorisation of the account holder or exceed the amount you were authorised to fill then you have committed a crime. This is known as forging a cheque.

The punishment for this offence is jail time up to two years and/or a fine.

Examples

  1. Mustafa took a blank cheque from Adrija and without her knowledge added in an amount of Rs. 10,000 along with falsifying her signature. He presented this cheque to the bank for payment. In this case, Mustafa has committed forgery.
  2. Adrija gave Mustafa a signed cheque and authorised him to put in an amount only up to Rs. 10,000. Mustafa fills in Rs. 20,000 and presents it to the bank for payment. Mustafa has committed forgery.

Refund of Excess Tax

If the Assessing Officer is satisfied that the amount of tax paid by you for any assessment year exceeds the amount with which you should actually be charged, then you are entitled to a refund of the excess.(( Section 237, Income Tax Act, 1961)) Any excess tax you pay can be claimed as a refund.

How to get your refund

If you want to claim any refund from the Income Tax Department, you can do so only if you file your ITR. There is no separate procedure as such in order to claim an income tax refund due to you. You can claim tax refund by simply filing the return of income(( Section 239, Income Tax Act, 1961)) and verification in the usual manner. The Income Tax Department will then confirm your ITR verification, including details of the refund amount. Your refund claim will either be accepted or rejected.

The excess tax will generally be refunded by crediting it in your bank account through ECS transfer. Sometimes, you may owe some payment to the Income Tax Department. In this case, the income tax authorities may set off the refund amount against the sum payable by you. This is done after giving you a written intimation of the action proposed to be taken.(( Section 245, Income Tax Act, 1961))

Delay in payment of refund

The Income Tax Department has been making efforts to settle refund claims at the earliest.​​ After applying for a refund, you can check your refund status. If the Assessing Officer does not grant the refund within three months after the month in which the refund is claimed, then the government shall pay you simple interest at 15% per annum on the refund amount.(( Section 243, Income Tax Act, 1961))